Ocwen’s terrible, horrible, no-good, very bad day

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Ocwen’s terrible, horrible, no-good, very bad day continued Thursday when the Consumer Financial Protection Bureau sued the mortgage servicing giant, immediately after more than 20 state regulators had practically crippled its business with cease-and-desist orders.

The day began when more than 20 state regulators ordered Ocwen to stop servicing or originating loans until it could address the mishandling of consumer escrow accounts. Unfortunately for Ocwen, reconciling all 2.5 million first-lien escrow accounts in question would cost the company about $1.5 billion an amount “well beyond Ocwen’s financial capacity to fund,” according to a North Carolina enforcement order.

On the heels of that announcement, the CFPB announced it was suing the company and its subsidiaries “for failing borrowers at every stage of the mortgage servicing process.”

The CFPB said in a statement that the lawsuit came after “years of widespread errors” by Ocwen, one of the nation’s largest nonbank mortgage servicers. “Ocwen allegedly botched basic functions like sending accurate monthly statements, properly crediting payments, and handling taxes and insurance.”

The CFPB also accused Ocwen of illegally foreclosing on borrowers, ignoring customer complaints, and selling servicing rights to loans without fully disclosing the mistakes it made in borrowers’ records.

“Ocwen has repeatedly made mistakes and taken shortcuts at every stage of the mortgage servicing process, costing some consumers money and others their homes,” CFPB Director Richard Cordray said. “Borrowers who have no say over who services their mortgage, so the Bureau will remain vigilant to ensure they get fair treatment.”

Ocwen, however, issued a strong denial that its practices harmed borrowers.

“Ocwen strongly disputes the CFPB’s claim that Ocwen’s mortgage loan servicing practices have caused substantial consumer harm,” the company said in a statement emailed to MPA. “In fact, just the opposite is true. Ocwen believes its mortgage loan servicing practices have and continue to result in substantial benefits to consumers above and beyond other mortgage servicers. The substantive allegations in today’s suit are inaccurate and unfounded. Indeed, the Company is unaware of the CFPB conducting any detailed review of Ocwen’s loan servicing files. Rather, the CFPB suit is primarily based on the CFPB’s flawed review of data and its self-serving conclusion about isolated instances where Ocwen self-identified ways we can do better.”

But the CFPB said it had found “substantial evidence” that the servicing giant “has engaged in significant and systemic misconduct at nearly every stage of the mortgage servicing process.” The agency alleged that Ocwen had mishandled customer accounts in myriad ways, including overcharging customers a total of $1.2 million for private mortgage insurance premiums and wrongfully initiating foreclosure proceedings against at least 1,000 people. According to the CFPB’s lawsuit, Ocwen:

Serviced loans using “error-riddled” information

Illegally foreclosed on homeowners

Failed to credit borrowers’ payments

Botched basic tasks in the management of escrow accounts

Mishandled hazard insurance and private mortgage insurance

Deceptively signed up and charged borrowers for add-on products

Failed to help heirs seeking foreclosure alternatives

Didn’t adequately investigate or respond to borrower complaints

Failed to provide complete and accurate information to new servicers

The CFPB also alleged that Ocwen had “failed to remediate borrowers for the harm it has caused.” The agency seeks a court order requiring Ocwen to follow mortgage servicing laws, pay penalties and provide relief for consumers.

COMMENTS

by Jeff | 4/21/2017 3:21:08 PM

Ocwen is just another abuser of the system in place. They will pay big in the end. I have dealt with them in more ways than one being a mortgage broker and always found their customer service to be lacking.

by Cathy| 4/24/2017 4:11:03 PM

When Ocwen first started handling my mortgage I had a really difficult time with them. I reported them to my state Department of Financial Institutions who sent them correspondence and that helped a lot. Then I applied for a mortgage modification and that was put in place which lowered the balance I owed plus my interest rate and monthly payment. Now at the end of each year Ocwen pays an amount on my mortgage for me when I make 12 on time payments. So as far as I can see they've made a lot of improvements over the last 8 years or so.

by Sara| 4/24/2017 4:28:44 PM

Yes, I'm a home owner whose mortgage was sold to Ocwen and I had nothing but trouble every since , my mortgage has be constantly rising due too not enough finance in my escrow and that's a bunch of bull cause every month I sent extra and they applied it where they wanted to now since everything so they said went up I have to pay more last year it went from 821 to 843 and this year in March it went from 843 to 911 and in April it went from 911 to 943 they said it because my state taxes went up and everything is prorated I ask can I send more for my escrow and they told me that and whatever is left over can it stay in my escrow and they told me they can not hold it there and that they would've to send me a disbursement check and I ask why not let it stay just in case something else goes up and they said no that against their policies, now I'm trying my best to have my mortgage on time every month but I actually think they're trying to steal my house please help me I take care of my mom daughter and granddaughter I don't know what else to do ( class action lawsuit)